Pacific B usiness R eview I nternational
A Refereed Monthly International Journal of Management Indexed With THOMSON REUTERS(ESCI)
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Dr. Rouf A. Mir Assistant Professor Department of Higher Education Government of Jammu & Kashmir |
Dr. Saima Manzoor Assistant Professor College of Business Administration University of Jazeera, Dubai |
In today’s competitive work environment, there is a paramount importance for the employee empowerment, since it can give an organization a sustainable competitive edge. The overall aim of this study is to examine the influence of employee empowerment on affective commitment and employees’ behavioral intention to stay. A quantitative research design was used via a structured questionnaire and hypotheses were simultaneously tested on a sample of 248 bank employees, using structural equation modeling (SEM). The findings of this study confirmed that psychological empowerment positively influence the affective commitment, and employee’s intention to stay, thereby underscores an avenue for managers to empower their human resource and provide such an environment where they can participate in decision-making, giving them freedom to handle their problems, and opportunity to use their skills and abilities. Increase in employee empowerment, in turn serves as the veins for higher employees affective commitment and higher intention to stay with the organization. This study is cross-sectional and so a longitudinal investigation of the understudy construct could be demanded. In addition, future research in other service sectors is a need to be conducted on a high note to make a wide generalization of the findings.
Keywords Confirmatory factor analysis (CFA), employee affective commitment, intention to stay, and psychological empowerment.
Modern businesses invest huge resources and put efforts to allure, employ and retain committed human resource (Macey et al., 2009). The growth in worldwide competition with the transformation towards service based economic system, and swift improvement in technology have asserted a high thrust on the business enterprises towards more decentralized organizational structures; thereby making employees more bound to carry a number of responsibilities. Pelit et al., (2011) reported that empowered employees feel that it is their own organization and they will perform more responsibly and do their work more volitionally. Such employees affiliate themselves with the goals of the business and devote additional time to work and feel proud of being part of the business enterprise (Kuo et al., 2010). Also, Michailova (2002) defined employee empowerment, as the degree to which employees are encouraged to make certain helpful decisions without seeking the consultation of their managers. Lee and koh (2001) views such aspect of empowerment related to the behaviour of a supervisor. Hsieh and Chao (2004) operationalised empowerment as, a discretionary construct providing employees with discretion and autonomy over their tasks by the management. Such perspective of empowerment focuses on the relationships between team leaders and members. Carless (2004) relates employee empowerment as employee’s perception of their individual power to tackle with the people they encounter at work. In other words, empowerment is a practice of decentralizing the power by involving employees in decision making (Carless, 2004) that encourages employee to use their own judgment to make quick decisions (Humborstad et al., 2008). In brief, empowerment could inspire employees and stimulate them to deliver high quality service as a discretionary effort. If employees are empowered to feel that it is their own business, they will act more responsibly and will show deep commitment towards their organization. Organizational commitment is a psychological state that binds the employees to the organization (Meyer, 1990). Individuals who are committed to their organizations tend to recognize the objectives of their organization (Buchanan, 1974). Thus, organizational commitment is vital; and moreover committed employees tend to be more willing to make personal sacrifices for their organization (Jaworski and Kohli, 1993) and would be more inclined to stay (Dewettinck and Ameijde, 2011).
In the management literature, scholars and managers consider the employees as the biggest factor that gives the competitive edge to the business enterprise. Employee’s involvement and empowerment is the key stone to the success (Siegall and Gardber, 2000). Pelit et al (2011) witnessed the nature of empowerment when analyzed, does generate good results. Former literature on empowerment attest that it paves way to performance (Yang and Choi, 2009; Koestner and Losier, 2002; Sigler and Pearson, 2000), organizational commitment (Homborstad and Cherry, 2011; Dewettinck and Ameijde, 2011; Joo and Shim, 2010), job satisfaction (Pelit et al, 2011; Seibert et al, 2004) and declines turnover intentions (Islam et al, 2014; Dewettinck and Ameijde, 2011). Spreitzer (2008) forwarded that the empowerment construct remained the interesting topic of scholars’ since its origin, but there still exist some gaps. Therefore, it is imperative to examine such construct with different variables for better comprehension. However, in the existing literature, the association among employee empowerment, job satisfaction, turnover intentions, and job performance have been examined. For example, association between empowerment and performance (Mir and Rainayee, 2015; Yang and Choi, 2009; Koestner and Losier, 2002; Kirkman and Rosen, 1999), association between empowerment and job satisfaction (Mir and Rainayee, 2015; Islam et al, 2014; Pelit et al., 2011; Bordin et al., 2007), psychological empowerment and turnover intentions (Albrecht and Andretta, 2011; Dewettinck and Ameijde, 2011) and they propose to search the same variables in different sectors and geographical areas (Mir and Rainayee, 2015; Islam et al, 2014; Humborstad and Perry; 2011). However, the relationship between the psychological empowerment and affective commitment has also examined in the literature but to lesser extent (Dewettinck and Ameijde, 2011). In the light of these suggestions and findings, the present study is an attempt to fill this gap, particularly in Indian banking sector.
2.1 Psychological empowerment and intention to stay
Employees who are psychologically empowered prefer to continue with the same organization rather than a new one (Islam et al, 2014). According to Biau’s (1964) social exchange theory, report that today’s worker like to feel psychologically empowered, and when they are empowered by the organization, they try to exchange it in terms of continuity with same organization. Thus, an empowered employee shows less intention to leave the organization (Griffeth et al, 2000). Many other scholars have identified that employee empowerment reduces the turnover intentions and psychologically empowered employees eventually prefer to continue with the same organization (Dewettinck and Ameijde, 2011; Homborstad and Perry, 2011; Albrecht and Andretta, 2011). Thus, it is hypothesized that:
H1: Psychological empowerment positively influences employee’s intention to stay with the organization.
2.2 Psychological empowerment and affective commitment
Employees who feel psychologically empowered exhibit more affective commitment with their organization (Islam et al., 2014). Affective commitment is the employees’ emotional attachment to the organization because it reflects a deep relationship between the employee and the organization. However, it is different from other forms of commitment viz., continuance and normative commitment which is based on a financial need to stay with the organization and normative commitment which focuses more on feeling on obligation to stay involved in the organization (Meyer and Allen, 1991). The relationship between the psychological empowerment and affective commitment has been examined in the literature but to lesser extent (Dewettinck and Ameijde, 2011). Islam et al (2014) conducted a study on 412 Malay-Chinese employees working in the banking and insurance sector found psychological empowerment positively influences the affective commitment (Path coefficient = 0.43). Albrecht and Andretta, (2011), reported the significant indirect effect of psychological empowerment on affective commitment through employee engagement. Kuo et al (2009) conducted a study in the field of high-tech industrial organizations in Taiwan and found that employee empowerment generate a positive and direct influence on employees commitment (path coefficient = 0.81). Several other researchers in the existing literature also demonstrated the significant impact of psychological empowerment on employees commitment (Dewettinck and Ameijde, 2011; Zhu et al., 2004; Avolio et al., 2004; Alsua, 2002). Based on this information, it is hypothesized that:
H2: Psychological empowerment is significantly associated with employee affective commitment.
2.3 Affective commitment and intention to stay
Affectively committed employees are more inclined to stay with the organization. On other side, dissatisfied and low committed employees are more likely to leave the organization at the first available opportunity (Carayon et al, 2006). Islam et al (2014) concluded that employees who are committed with their organizations show less intention to leave the organization. Albrecht and Andretta, (2011), conducted a study on a sample of 139 employees of a community health service and found that affective commitment has an impact on the employees turnover intentions significantly (Path coefficient = -0.77). Several other scholars also report that affective commitment of employees reduce employees intention to leave the organization (Weng and McElroy, 2012; Homborstad and Perry, 2011; Felfe and Yan, 2009). Similarly, Dewettinck and Ameijde (2011) investigates the relationship between employee attitudes and behavioural intentions on a sample of 380 frontline service employees and found employee attitude which also includes affective commitment to be related with to employees intention to stay (Path coefficient = 0.48). Therefore, it is hypothesized that:
H3: Affective commitment positively influences employee’s intention to stay among sample participants.
3.1 Sample and sampling procedure
The structured questionnaires were administered to the bank employees in Northern region of India. A total of 400 employees were selected on the basis of a conveyance sampling technique. Of a total 400 questionnaire distributed, 248 were found to be usable for further analysis registering the response rate of 62 percent.
3.2 Sample characteristics and control variables
In terms of gender, 59.3 per cent were male, and remaining was female. Regarding qualification, 45.6 per cent had a graduate level of academic education, 45.2 per cent had a higher level (a masters degree), and rest had secondary level. In terms of service experience, 54 per cent of sample respondents had been with the organisation for less than 5 years, 32.3 per cent had been there from 5 to 10 years, and rest above 15 year.
Previous research revealed that these demographic variables may have impact on the understudy constructs. Hence, these demographic variables have been treated as control variables under the present study.
3.3 Instrument measures
All the constructs in the questionnaire used established measures. A Likert type five-point scale used for the sake of uniformity for measuring the variables understudy with as light modification to suit the research objects and situation. To ensure the internal reliability of the items measured, reiability tests were conducted by examining Cronbach’s alpha values.
To measure the participants’ perception of empowerment at work, 5-item Hayes’ (1994) employee empowerment scale was adapted with an item being “I have the authority to correct customer problems when they occur”.
Affective commitment construct was measured by Meyer and Allen (1991) four-item scale. A sample item is “I feel a strong sense of belonging to this organization”.
The Intention to stay scale was borrowed from Bluedorn (1982) which included five items with a sample item being “I will not give up this organization easily”.
4.1 Measurement model
Confirmatory factor analysis (CFA) technique is used to verify that the scale items for each construct are both reliable and valid. Our analysis for evaluating the measurement model fit, relies on various global model fit indices, such as goodness-of-fit index (GFI), adjusted goodness-of-fit index (AGFI), the normal fit index (NFI), comparative fit index (CFI), and Root mean squared error of approximation (RMSEA). Although the ϰ2 value 81.459 with 51 degree of freedom was significant (p-value 0.000) however, ϰ2 is sensitive to sample size (Kline, 1998). The GFI, AGFI, NFI, CFI, and RMSEA values for measurement model were 0.950, 0.924, 0.962, 0.986 and 0.049 respectively. Hence, our analysis support that the sample data fits the model well because the indices were found to meet their prescribed thresholds. To establish the convergent validity, factor loadings, composite reliability, and average variance extracted were calculated. The standardized factor loadings of all items for each construct exceeded recommended limit of 0.5 except two items EMP5 and INT5 for employee empowerment and intention to stay constructs respectively. Both the items were eliminated for further analysis, the parameter significance of former item were found to be insignificant and latter one exhibited very low loading to its respective construct. Composite reliability (CR) value is often used in conjunction with SEM models. The calculated CR values ranges between 0.881 and 0.937 far exceed the prescribed limit of 0.70 for under study constructs (Hair et al., 2013). In addition, average variance extracted (AVE) were also calculated to further support the convergent validity. The calculated AVE values were 0.692, 0.648, and 0.788 for employee empowerment, affective commitment, and intention to stay constructs respectively far exceeds the recommended limit of 0.50 (Hair et al. 2013). Moreover, discriminant validity of the constructs was also examined, high discriminant validity provides the evidence that a construct is unique and captures some phenomenon other measure do not. The results are presented in table 1, the squared correlations for each construct is less than the average variance extracted (AVE) by the indicators measuring that construct supporting sufficient discriminant validity. Thus, our measurement model presented adequate reliability, convergent validity and discriminant validity. The valid CFA model is shown in figure 1.
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Table 1 : Discriminant validity |
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Constructs |
(1) |
(2) |
(3) |
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Employee empowerment |
.692 a |
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Affective commitment |
.161 |
.648 a |
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Intention to stay |
.352 |
.157 |
.788 a |
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Note: a Diagonals represent the average variance extracted while the others entries represent the squared correlation coefficients. |
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4.2 Structural model
To test the proposed model and research hypotheses, Structural Equation Modeling (SEM) technique was adopted using Maximum Likelihood Estimate (MLE) approach through AMOS 20 software. Structural equation modeling (SEM) is a procedure for estimating a series of dependence relationships among a set of concepts or constructs represented by multiple measured variables and incorporated into an integrated model. The present study assumes psychological empowerment as exogenous variable and intention to stay as endogenous variable, and affective commitment as both exogenous and endogenous. Overall structural model fit yielded, ᵪ2 value of 81.459 (P< 0.001, 51 df), Goodness of Fit (GFI) value of 0.950, the Adjusted Goodness of Fit value of 0.924, the Normal Fit Index (NFI) value of 0.962, the Comparative Fit Index (CIF) value of 0.986, and Root Mean Squared Error of Approximation (RMSEA) (which measures the discrepancy per degree of freedom) value of 0.049, are within generally acceptable limits, indicating good structural model fit. However, the closer the structural model fit is to the CFA measurement model fit, the more confidence can have in the model (Hair et al. 2013).
Validation of the model is not complete without examining the individual parameter estimates (Hair et al., 2015). The path coefficients assist us to make inferences about the hypothesized relationships. All the paths among constructs were statistically significant. Table 2 and figure 2 presented the detailed results of the structural model. Psychological empowerment was found highly positively associated with intention to stay (H3: path coefficient =0.52) followed by affective commitment (H1: path coefficient = 0.40). In addition, affective commitment also shows significant association with intention to stay commitment (H1: path coefficient = 0.19).Psychological empowerment explains 16 percent variance in affective commitment and both psychological empowerment and affective commitment accumulated 38 per cent of the variance in intention to stay with the organization as can been depicted from the structural model presented in Figure 2.
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Table 2: Significance of casual paths between Latent variables in the Structured Model |
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Casual Path |
Estimate |
S.E |
CR |
p value |
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Intention to stay ß Psychological empowerment |
.622 |
.082 |
7.585 |
*** |
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Intention to stay ß Affective commitment |
.212 |
.072 |
2.944 |
*** |
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Affective commitment ß Psychological empowerment |
.432 |
.076 |
5.684 |
*** |
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Note: p-value is significant at 5 level of significance |
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The overall aim of the present study is to investigate the association between psychological empowerment, affective commitment, and intention to stay in the context of banking sector. The results of this research extend previous research findings by pointing toward a comprehensive understanding of how psychological empowerment influences affective commitment and employees intention to stay within the organization. Overall, the results of the understudy signify that when employees of the organization feel psychological empowered, the employees feel more committed and will exhibit more inclination of staying with the organization. More specifically, this study confirms that the psychological empowerment is positively associated with employees’ intention to stay as hypothesized in H1. The results of the present study reveal that employees who feel psychological empowered shows greater intentions to stay with the organization than those employees who are less empowered. The findings of this hypothesis are in accordance with Islam et al (2014) who conducted a study on 412 Malay-Chinese employees working in the banking and insurance sector and found psychological empowerment reduces employees turnover intention (Path coefficient = -0.51). Homborstad and Perry (2011) also found the significant association between psychological empowerment and turnover intentions. Further, our results are in line with other previous studies (Dewettinck and Ameijde, 2011; Albrecht and Andretta, 2011). In accordance with existing available literature, the findings of the present study suggests that more the psychological empowerment feel by the employees, more intention to stay they show towards the organization.
The relationship between the psychological empowerment and affective commitment has been examined in the literature but to lesser extent (Dewettinck and Ameijde, 2011). With the aim to fill this gap, the present study confirmed the relationship between psychological empowerment and affective commitment in the context of banking sector. The results are in line with Kuo et al (2009), who conducted a study in the field of high-tech industrial organizations in Taiwan and found that employee empowerment generate a positive and direct influence on employees commitment (path coefficient = 0.81). The results of Islam et al (2014) provide same positive results of relationship in the context of banking and insurance sector. Further, few other previous studies furnish that psychological empowerment increase employee affective commitment towards the organization (Albrecht and Andretta, 2011; Dewettinck and Ameijde, 2011; Zhu et al., 2004; Avolio et al., 2004; Alsua, 2002). The findings of this study suggest that when employees in an organization feel empowered, they try to exchange it, in the way of positive affective commitment towards the organization.
Affectively committed employees are more inclined to stay with the organization. Low committed employees are more likely to leave the organization at the first available opportunity (Carayon et al, 2006). As hypothesized in H3, the affective commitment influences positively employee intention to stay was also confirmed in the present study. The findings of this study are in parallel with Dewettinck and Ameijde (2011) that examined the relationship between employee attitudes (includes affective commitment) and behavioural intentions on a sample of 380 frontline service employees and found affective commitment to be related with to employees’ intention to stay. Albrecht and Andretta, (2011) found the same results on a sample of 139 employees of a community health service that affective commitment impacts the employees’ turnover intentions significantly. In addition, the findings of previous studies like (Islam et al. 2014; Weng and McElroy, 2012; Homborstad and Perry, 2011; Felfe and Yan, 2009) are in line with the findings of the present study.
In conclusion, the present study suggests that organizations are likely to enhance affective commitment and intention to stay by empowering their employees. In other words, this study reveals that psychological empowerment serves as catalyst in facilitating and stimulating the affective commitment and employees’ intention to stay in the context of Indian banking sector. Thus, to augment affective commitment and employees’ intention to stay, managers need to empower their human resource and furnish such an environment where they can participate in decision-making, giving them freedom to handle the problems, and opportunity to use their skills and abilities. Increased employee empowerment, in turn serves as the veins for higher employees affective commitment and higher intention to stay towards the organization. Thus, employee empowerment is of paramount important in today’s competitive work environment because it can give an organization a competitive edge.
5.1 Limitation and future avenues
This study has some limitations; first, present study uses general measurement scales for measuring the variables understudy. For future research, it would be more fruitful to use elaborated measurement scales for the better validity of the measures. Another, limitation is with respect to sample size, the researcher restricted this study specifically to bank employees, and thus the results of this study cannot be generalized to other professional level jobs such as Telecom, Education, Tourism, and other service sectors. In addition, this study focuses on only two outcome variables of psychological empowerment viz., affective commitment and intention to stay; future research should consider antecedents of psychological empowerment and other outcome variables such as continuance commitment, normative commitment, and job performance as well. Further, to enhance the power of generalization, the study should be replicated in different geographical areas as well.
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